Thursday, June 30, 2011

Jun 27: Worldwide, 2010 was one of the two warmest years on record according to the 2010 State of the Climate report, which was release by the National Oceanic and Atmospheric Administration(NOAA). The peer-reviewed report, issued in coordination with the American Meteorological Society, was compiled by 368 scientists from 45 countries. It provides a detailed, yearly update on global climate indicators, notable climate events and other climate information from every continent.

This year's report tracks 41 climate indicators -- four more than last year -- including temperature of the lower and upper atmosphere, precipitation, greenhouse gases, humidity, cloud cover, ocean temperature and salinity, sea ice, glaciers, and snow cover. Each indicator includes thousands of measurements from multiple independent datasets that allow scientists to identify overall trends. While several well-known cyclical weather patterns had a significant influence on weather and climate events throughout the year, the comprehensive analysis of indicators shows a continuation of the long-term trends scientists have seen over the last 50 years, consistent with global climate change.

Thomas Karl, L.H.D, director of NOAA's National Climatic Data Center in Asheville, NC said, We're continuing to closely track these indicators because it is quite clear that the climate of the past cannot be assumed to represent the climate of the future. These indicators are vital for understanding and making reliable projections of future climate." Last year was marked by important climate oscillations like the El Niño-Southern Oscillation and the Arctic Oscillation, which affected regional climates and contributed to many of the world's significant weather events in 2010. Highlights of some of the climate indicators include:

Temperature: Three major independent datasets show 2010 as one of the two warmest years since official record-keeping began in the late 19th century. Annual average temperatures in the Arctic continued to rise at about twice the rate of the lower latitudes.

Sea Ice & Glaciers: Arctic sea ice shrank to the third smallest area on record, and the Greenland ice sheet melted at the highest rate since at least 1958. The Greenland ice sheet melt area was approximately 8 percent more than the previous record set in 2007. Alpine glaciers shrank for the 20th consecutive year. Meanwhile, average sea ice extent in the Antarctic grew to an all-time record maximum in 2010.

Sea Surface Temperature and Sea Level: Even with a moderate-to-strong La Niña in place during the latter half of the year, which is associated with cooler equatorial waters in the tropical Pacific, the 2010 average global sea surface temperature was third warmest on record and sea level continued to rise.

Ocean Salinity: Oceans were saltier than average in areas of high evaporation and fresher than average in areas of high precipitation, suggesting that the water cycle is intensifying.

Greenhouse Gases: Major greenhouse gas concentrations continued to rise. Carbon dioxide increased by 2.60 ppm, which is more than the average annual increase seen from 1980-2010.

NOAA indicated that several major cyclical weather patterns played a key role in weather and climate in 2010:

El Niño-Southern Oscillation: A strong warm El Niño climate pattern at the beginning of 2010 transitioned to a cool La Niña by July, contributing to some unusual weather patterns around the world and impacting global regions in different ways. Tropical cyclone activity was below normal in nearly all basins around the globe, especially in much of the Pacific Ocean. The Atlantic basin was the exception, with near-record high North Atlantic basin hurricane activity. Heavy rains led to a record wet spring (September  November) in Australia, ending a decade-long drought.

Arctic Oscillation: In its negative phase for most of 2010, the Arctic Oscillation affected large parts of the Northern Hemisphere causing frigid arctic air to plunge southward and warm air to surge northward. Canada had its warmest year on record while Britain had its coldest winter at the beginning of the year and coldest December at the end of the year. The Arctic Oscillation reached its most negative value in February, the same month several cities along the U.S. East Coast had their snowiest months ever.

Southern Annular Mode: An atmospheric pattern related to the strength and persistence of the storm track circling the Southern Hemisphere and the Antarctic led to an all-time maximum in 2010 of average sea ice volume in the Antarctic.

Wednesday, June 29, 2011

Jun 28: The U.S. Supreme Court has agreed to hear the Ninth Circuit case of Sackett v. U.S. EPA (SupCt docket No. 10-1062). The High Court included the specific proviso that the review will be limited to the following questions: (1) May petitioners seek pre-enforcement judicial review of the administrative compliance order pursuant to the Administrative Procedure Act, 5 U. S. C. §704? (2) If not, does petitioners' inability to seek pre-enforcement judicial review of the administrative compliance order violate their rights under the Due Process Clause?

On September 20, 2010, the Ninth Circuit decided the case regarding the determination of whether Federal courts have subject-matter jurisdiction to conduct review of administrative complianceorders issued by the U.S. EPA under the Clean Water Act (CWA) before EPA has filed a lawsuit in Federal court to enforce the compliance order. The Appeals Court said, "We join our sister circuits and hold that the Clean Water Act precludes pre-enforcement judicial review of administrative compliance orders, and that such preclusion does not violate due process."

In making its ruling, the Appeals Court indicated that, ". . .we do not work from a blank slate. Every circuit that has confronted this issue has held that the "CWA impliedly precludes judicial review of compliance orders until the EPA brings an enforcement action in federal district court." The Appeals Court cited cases from the 10th, 6th, 4th, and 7th Circuits and many Districts and said, "The reasoning of these courts is persuasive to us, as well as the broad uniformity of consensus on this issue."

Tuesday, June 28, 2011

Jun 27: Representative Ed Markey (D-MA), the Ranking Member of the Natural Resources Committee in a letter to the Securities and Exchange Commission asks whether a 2008 rule allowing natural gas companies more flexibility in how they reported on unproven gas reserves had allowed the companies to "paint an overly-optimistic picture of their reserves and the industry's potential contribution to America's energy needs." The letter was sent by Rep. Markey in response to articles published in the New York Times (NYT) questioning whether the new rules provide investors with sufficient information regarding natural gas reserves and why they fail to provide for third-party verification of reported reserves. On June 25, NYT published an article entitled, Insiders Sound an Alarm Amid a Natural Gas Rush; followed by a second article, Behind Veneer, Doubt on Future of Natural Gas, on June 26 (See links below).

Markey said, "The SEC rules allow natural gas companies to self-report their reserves without providing enough detail or independent review of their claims. When it comes to fuel that millions of Americans depend upon to meet their energy needs, the SEC should not violate the 'trust, but verify' principle. The SEC needs to provide answers on how they think these new rules could be affecting assumptions of domestic natural gas reserves."

According to a release from Markey, under prior SEC rules, natural gas companies were allowed to count gas only from areas close to their active wells as part of their proven reserves. Under the 2008 rules adopted by the Bush administration just days before former Chairman Christopher Cox's departure from the commission, companies can now include gas from yet untapped fields based on modeling methods. Markey indicated that the Times article reports that natural gas companies were not required under the rule to disclose precise details about the technology used to estimate reserve sizes, and that while the SEC considered requiring third party audits to verify the new reserve estimates, it did not do so in the final rule.

Markey sent a similar inquiry to the Energy Information Administration (EIA) about their reported staff concerns regarding the official estimates of domestic natural gas reserves. In that letter, Markey asked the EIA "to justify their bullish claims on natural gas resources and reserves in light of reports in The New York Times "indicating skepticism exists within. . . [EIA] about its own estimates. In a letter to the head of the EIA, Markey asked "how the agency was justifying optimistic estimates of domestic natural gas production, especially from shale gas formations that require the increasingly-scrutinized technique called hydraulic fracturing to extract the trapped fuel, in light of the revelations."

Markey said, "We need to know whether the natural gas located underneath the surface is a real source of fuel for the next generation, or a speculative bubble hyped by the oil and gas industry, and echoed by the federal government's energy experts. Natural gas has been touted as a 'bridge fuel' that will take us from dirtier fossil fuels to cleaner renewable energy technologies. If these claims are accurate, natural gas could offer a viable pathway towards meeting our energy needs while reducing carbon dioxide pollution. If they are not, America's natural gas future could be a bridge to nowhere."

Chesapeake Energy Corporation CEO Aubrey McClendon immediately sent a lengthy letter to all company employees in response to the NYT "Sound an Alarm" article. The letter, posted on the Company Facebook page indicates in part, "The story is misleading, at best, and is the latest in a series of articles produced by this publication that obviously have an anti-industry bias. We know for a fact that today's NYT story is the handiwork of the same group of environmental activists who have been the driving force behind the NYT's ongoing series of negative articles about the use of fracking and its importance to the US natural gas supply growth revolution  which is changing the future of our nation for the better in multiple areas. It is not clear to me exactly what these environmental activists are seeking to offer as their alternative energy plan, but most that I have talked to continue to naively presume that our great country need only rely on wind and solar energy to meet our current and future energy needs. . .

"Since the shale gas revolution and resulting confirmation of enormous domestic gas reserves, there has been a relatively small group of analysts and geologists who have doubted the future of shale gas. Their doubts have become very convenient to the environmental activists I mentioned earlier. . . But I wanted you to know that this reporter's claim of impending scarcity of natural gas supply contradicts the facts and the scientific extrapolation of those facts by the most sophisticated reservoir engineers and geoscientists in the world. Not just at Chesapeake, but by experts at many of the world's leading energy companies that have made multi-billion-dollar, long-term investments in U.S. shale gas plays, with us and many other companies. . ."

Monday, June 27, 2011

Jun 23: The National Academy of Sciences (NAS), National Research Council (NRC) announced a new report entitled, Policy Options for Reducing Energy Use and Greenhouse Gas Emissions from U.S. Transportation, and indicated, "It will take more than tougher fuel economy standards for U.S. transportation to significantly cut its oil use over the next half century. It will likely require a combination of measures that foster consumer and supplier interest in vehicle fuel economy, alternative fuels, and a more efficient transportation system. Public interest in reducing the cost of securing the nation's energy supplies, curbing emissions of carbon dioxide and other greenhouse gases (GHGs), and improving transportation operations could motivate such varied actions."

Emil Frankel, director of transportation policy, Bipartisan Policy Center, Washington, DC and chair of the committee that wrote the report said, "It is not simply a matter of choosing a single best policy. Decisions about whether and how to reduce transportation's use of oil will require officials to consider a range of options." The U.S. transportation sector accounts for more than two-thirds of the nation's oil use and about 25 percent of its carbon dioxide emissions. Federal regulations over the past 40 years such as fuel economy standards have helped the transportation sector make significant gains in controlling its oil use and emissions. However, the NAS committee said "these measures are likely to do little more than temper growth in the sector's carbon dioxide emissions and demand for oil over the next several decades."

According to the report, to achieve earlier, larger, and sustained gains, a longer-term strategy involving a mix of policy measures and impacts on transportation energy demand and supplies is needed. The report was developed to inform policymakers of the pros and cons of available policy options to reduce energy use and emissions over time from cars, trucks, and aircraft -- the U.S. transportation modes that collectively account for 95 percent of transportation oil use.

The policy options examined in the report include a range of approaches but are not ranked in any particular order:

Because some of the policies are market and demand oriented, others regulatory, and others hybrids of the two, they produce different responses from users and suppliers of transportation vehicles and fuels. They also have different track records of implementation and thus differing prospects for early application. The report says that any serious actions must ultimately cut the amount of oil used and GHGs emitted from the nation's 225 million cars and light trucks. Policymakers need to look beyond measures that center largely on suppliers of vehicles and fuels and adopt policies that will also cause consumers to respond with strong and sustained interest in saving energy and lowering emissions.

In assessing opportunities for policy, the report says fuel taxes have both the greatest applicability across modes and the widest scope of impact. Raising fuel prices can lead to increased consumer and supplier interest in more fuel-efficient vehicles and operations. It can also reduce the total amount of energy-intensive travel by making it more expensive. However, the report indicates, "political resistance to fuel taxes is high. The federal gas tax, approximately 18 cents per gallon, has not been raised since 1993. To make this a more viable option over time, pursuing innovative ways to use the new tax dollars could help spur and sustain public support."

The committee said that vehicle standards with a more focused impact on vehicle energy and emissions performance have the advantage of familiarity and public acceptance. This advantage is important because it can mean early savings in oil use and emissions. Purchase incentive programs that impose fees on inefficient vehicles to fund rebates on efficient ones -- known as feebates -- may ultimately motivate consumers to buy the newer designs. However, neither efficiency standards nor such purchase incentives will prompt vehicle users to engage in more energy-efficient operations, such as driving less or carpooling more.

Creating an environment less dependent on private vehicles may pay dividends by reducing the total demand for vehicle travel, but the Committee notes that it "may take decades to bring about through land-use planning and controls." In the meantime, public investment in infrastructure for highways, airways, and waterways can make transportation more efficient while reducing system delays and congestion. These operational benefits may be politically palatable ways to save energy and emissions in the near term, especially if consumers face higher energy prices down the road.

Friday, June 24, 2011

Jun 24: As part of a filing with the U.S. Court of Appeals for the DC Circuit, U.S. EPA has set a schedule for issuing updated air toxics standards for boilers and certain solid waste incinerators. To ensure that the Agency's standards are based on the best available data and the public is given ample opportunity to provide additional input and information, the Agency will propose standards to be reconsidered by the end of October 2011 and issue final standards by the end of April 2012. This is the best approach to put in place technically and legally sound standards that will bring significant health benefits to the American public.

Following the April 2010 proposals, the Agency received more than 4,800 comments from businesses and communities, including a significant amount of information that industry had not provided prior to the proposals. Based on this input, the Agency made extensive revisions that resulted in dramatic cuts in the cost of implementation, while maintaining maximum public health benefits. Because the final standards significantly differ from the proposal, however, EPA believed further public review was required and announced it would reconsider the standards.

After the final standards were issued, multiple industry groups petitioned the Agency to delay the effective date of standards for major source boilers and commercial and industrial solid waste incinerators. In May 2011, EPA announced it would stay the effective date of those standards [See WIMS 5/16/11]. EPA did not stay the effective date of the standards for boilers located at area sources of air toxic emissions.

In its filing with the Appeals Court, EPA said, "Petitioners Sierra Club, et al., (collectively Sierra Club) oppose holding the case in abeyance for any period longer than three months. Sierra Club does not address the appropriateness of the Court adjudicating challenges to a rule that may soon be modified as the result of the reconsideration process. Rather, Sierra Club's Opposition is based on its concern that the litigation, and the effective date of the rule, will be indefinitely delayed. Sierra Club's concern is misplaced.EPA intends to complete its reconsideration process expeditiously. Specifically, EPA intends to sign a proposed rule by October 31, 2011, and to sign a final rule by April 30, 2012, less than one year from now. Given the potential waste of judicial resources in proceeding to review this rule when it may be modified in a short time the case should be held in abeyance pending completion of the reconsideration process."

On June 22, responding to what they say are "urgent calls from job creators across a range of industries, bipartisan members of the U.S. House Committee on Energy and Commerce have introduced H.R.2250, the EPA Regulatory Relief Act of 2011. The proposal would direct EPA to develop achievable standards affecting non-utility boilers and incinerators and grants additional time for development of and compliance with the rules. The legislation would stay the boiler and incinerator rules and calls for EPA to repropose the rules within 15 months and extend compliance times from 3 to 5 years [See WIMS 6/22/11].

Thursday, June 23, 2011

Jun 23: International Energy Agency (IEA) Executive Director Nobuo Tanaka announced that the 28 IEA member countries, including the United States, have agreed to release 60 million barrels (mb) of oil in the coming month in response to the ongoing disruption of oil supplies from Libya. IEA said this supply disruption has been underway for some time and its effect has become more pronounced as it has continued. The normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery.

In deciding to take the collective action, IEA member countries agreed to make "2 million barrels of oil per day" available from their emergency stocks over an initial period of 30 days. Leading up to this decision, the IEA has been in close consultation with major producing countries, as well as with key non-IEA importing countries. Tanaka said, "Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks. I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy."

The IEA estimates that the unrest in Libya had removed 132 mb of light, sweet crude oil from the market by the end of May. Although there are huge uncertainties, analysts generally agree that Libyan supplies will largely remain off the market for the rest of 2011. Given this loss and the seasonal increase in demand, the IEA warmly welcomes the announced intentions to increase production by major oil producing countries. As these production increases will inevitably take time and world economies are still recovering, the threat of a serious market tightening, particularly for some grades of oil, poses an immediate requirement for additional oil or products to be made available to the market. The IEA collective action is intended to complement expected increases in output by these producing countries, to help bridge the gap until sufficient additional oil from them reaches global markets.

Total oil stocks in IEA member countries amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public stocks held exclusively for emergency purposes. IEA net oil-importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports. These countries are holding stock levels well above this minimum amount, currently at 146 days of net imports.The IEA Governing Board will within 30 days of this notice reassess the oil market, review the impact of their coordinated action and decide on possible future steps.

In the United States, Department of Energy Secretary Steven Chu announced that the U.S. and its partners in IEA have decided to release a total of 60 million barrels of oil onto the world market over the next 30 days to offset the disruption in the oil supply caused by unrest in the Middle East. He said the U.S. will release "30 million barrels" of oil from the Strategic Petroleum Reserve (SPR). The SPR is currently at a historically high level with 727 million barrels. Chu said, "We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery. As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary."

Chu indicated that the U.S. has been in close contact with oil producing and consuming countries about disruptions to the international oil market that could affect the global economy. The situation in Libya has caused a loss of roughly 1.5 million barrels of oil per day - particularly of light, sweet crude - from global markets. As the U.S. enters the months of July and August, when demand is typically highest, prices remain significantly higher than they were prior to the start of the unrest in Libya.

The United Kingdom (UK) is contributing some "3 million barrels." Chris Huhne, UK Secretary of State for Department of Energy and Climate Change said, "This coordinated global action shows that both producer and consumer nations around the world are taking decisive steps to ensure enough oil is available. That's why we strongly welcome Saudi Energy Minister al-Naimi's statement earlier this month that Saudi Arabia and other Gulf countries will increase oil production to supply whatever the market needs."

House Speaker John Boehner (R-OH) released a statement on the SPR announcement saying, "Everyone wants to help the American people and lower prices at the pump -- especially now, in tough economic times. And it is good that the Obama Administration is conceding that increased supply will lower those costs. But by tapping the Strategic Petroleum Reserve, the President is using a national security instrument to address his domestic political problems. The SPR was created to mitigate sudden supply disruptions. This action threatens our ability to respond to a genuine national security crisis and means we must ultimately find the resources to replenish the reserve -- at significant cost to taxpayers. There is a better way: we need a sensible energy policy to increase the supply of American energy, which will lower costs and create millions of American jobs. According to the Congressional Research Service, the U.S. has 163 billion barrels of recoverable oil. Unfortunately, this administration has consistently blocked the production of American-made energy and opposed legislative efforts in the House to increase supply. House Republicans will continue to advance the American Energy Initiative and work to lower gas prices and create jobs by responsibly increasing the production of energy here at home."

House Minority Leader Nancy Pelosi (D-CA) issued a statement saying, "Today, America's families face near-record prices at the pump while Big Oil rakes in near-record profits. With speculators and special interests standing in the way of lower gas prices, with Republican leaders supporting continued giveaways to the oil industry and letting speculators off the hook, and with Middle East unrest disrupting the supply of oil worldwide, we must do everything in our power to ease the burden on American consumers. The Obama Administration is fulfilling this charge by releasing oil from our national stockpile to bring relief to our middle class, responding to calls by House Democrats, led by Congressmen Bishop and Markey. We are already seeing the results in falling oil prices. This action echoes Democratic legislation in our Clean Energy Jobs Now agenda -- the Taxpayer and Gas Price Relief Act -- that calls for a release from the SPR during periods of high gas prices, along with an end to tax breaks for Big Oil. We are sending a clear message to speculators: we stand with American consumers and businesses; we will keep working to alleviate their economic struggles; and we will place our families' interests ahead of Big Oil's bottom line."

The National Petrochemical & Refiners Association (NPRA) President Charles Drevna criticized the decision by the Obama administration to release 30 million barrels of oil from the SPR. He said, "Releasing oil from the Strategic Petroleum Reserve today, when gasoline prices are falling and there is no supply shortage, makes no sense and weakens our economic and national security. The Strategic Petroleum Reserve is an emergency lifeline to protect our nation against critical shortages in our oil supply and shouldn't be used as a Strategic Political Reserve to boost the popularity of elected officials.

"This action today will do nothing to benefit consumers. Instead, it leaves our nation vulnerable if hurricanes, other natural disasters or a foreign crisis causes a real supply shortage. These are the types of emergencies the Strategic Petroleum Reserve was created to protect against. Instead of releasing 30 million barrels of oil from our emergency supply when there is no emergency, our leaders should be drawing up plans to lift the roadblocks preventing our nation from utilizing the billions of barrels of oil and natural gas reserves right here in America. This would produce more energy, more jobs and economic prosperity. No other nation puts so many limits on the use of its own natural resources to benefit its own people."

The U.S. Chamber of Commerce also said it thinks the release of SPR oil "is bad energy policy." Karen Harbert, president and CEO of the U.S. Chamber's Energy Institute said,

"The Obama Administration's decision to release oil from the Strategic Petroleum Reserve is ill-advised and not the signal the markets need. Unrest in the Middle East is likely to continue for quite some time, so a temporary increase in supply is not a substitute for a long term fix. Our reserve is intended to address true emergencies, not politically inconvenient high prices. Rather than dabbling around the edges, the Administration should take steps to increase domestic production of oil -- on and offshore, like the bill the House passed last night. With U.S. crude oil production expected to decrease by 90 million barrels in the next year, the Administration should instead focus on increasing domestic production to improve our energy security, reduce our dependence on foreign oil, and create thousands of jobs."

Access a release from IEA (click here). Access a fact sheet from IEA with more details (click here). Access a table of IEA members and their latest import levels and public and private reserve levels (click here). Access a release from DOE (click here). Access a release from the UK (click here). Access a release from Speaker Boehner (click here). Access a release from Rep. Pelosi (click here). Access a release from NPRA (click here). Access a release from the U.S. Chamber Energy Institute (click here). [*Energy/Oil]

Wednesday, June 22, 2011

Jun 22: Responding to what they say are "urgent calls from job creators across a range of industries, bipartisan members of the U.S. House Committee on Energy and Commerce have introduced H.R.2250, the EPA Regulatory Relief Act of 2011. The proposal, which directs EPA to develop achievable standards affecting non-utility boilers and incinerators and grants additional time for development of and compliance with the rules, was offered by Representatives Morgan Griffith (R-VA) and G.K. Butterfield (D-NC), together with Representatives John Barrow (D-GA), Jim Matheson (D-UT), Cathy McMorris Rodgers (R-WA), Pete Olson (R-TX), Mike Ross (D-AR), and Steve Scalise (R-LA). The lawmakers said economic analyses have "projected that compliance with the rules as currently proposed could cost in excess of $14 billion, which could put more than 200,000 jobs at risk."

In a joint statement the legislators said, "Our goal is simple. With the EPA Regulatory Relief Act, we are giving EPA the time it needs -- the time it has requested -- to address difficult technical issues and develop rules that are workable in the real world. Likewise, businesses, institutions, and facilities need adequate time to finance the new monitoring and control equipment that will be required to meet the new standards, to obtain necessary regulatory approvals, and to design, procure, install, test, train personnel, and start up equipment. Without regulatory relief, EPA's current rules endanger hundreds of thousands of jobs nationwide by forcing plant shutdowns and relocation of American manufacturing and jobs overseas. We look forward to working with our colleagues on both sides of the aisle, and the Obama administration, to see this type of common-sense relief become law."

Energy and Commerce Committee Chairman Fred Upton (R-MI) lent his support to the legislation, endorsing what he called "the members' bipartisan approach to protecting jobs and pursuing sensible regulations." He said, "All year long, the Energy and Commerce Committee has focused on creating jobs and spurring economic growth. The EPA Regulatory Relief Act is exactly the brand of regulatory common sense we promised. This bill gives EPA the time it needs to write rules that make sense, and it gives businesses, schools, and other affected facilities the time they need to put the rules into action. This bill is proof positive that Members can work together to protect jobs and guard against regulatory overreach."

On February 23, 2011, in response to Federal court orders in Sierra Club v. EPA requiring the issuance of final standards [See WIMS 1/21/11], U.S. EPA issued final Clean Air Act standards for boilers and certain incinerators -- the so-called "Boiler MACT" rules [See WIMS 2/23/11]. In response to a September 2009 court order, EPA issued the proposed rules in April 2010, prompting significant public input. The proposed rules followed a period that began in 2007, when a Federal court vacated a set of industry specific standards proposed during the Bush Administration. Based on the public input received following the April 2010 proposal, EPA made extensive revisions, and in December 2010, requested additional time for review to ensure the public's input was fully addressed. EPA had sought in its motion to the court an extension to finalize the rules by April 13, 2012. Instead, the court granted EPA only 30 days and it issued the final rules on March 21, 2011.

On May 16, 2011, EPA announced a temporary stay of the effective date of two of the rules (Boiler MACT and CISWI Rules), stating, "[t]he stay will allow the agency to seek additional public comment before requiring thousands of facilities across multiple, diverse industries to make investments that may not be reversible if the standards are revised following reconsideration and a full evaluation of all relevant data." The Members pointed out that, "The stay will last only until completion of the reconsideration process (or the judicial review of the rules if earlier). The stay does not apply to the other two rules and does not extend the compliance deadlines for any of the four rules." [See WIMS 5/16/11].

H.R.2250 would stay the four proposed EPA rules including:

(1) National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters, published at 76 Fed. Reg. 15608 (March 21, 2011).

(2) National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial, and Institutional Boilers, published at 76 Fed. Reg. 15554 (March 21, 2011).

According to a release from the members, "to protect jobs and allow time for development of achievable standards," H.R.2250 would:

Provide EPA with at least 15 months to re-propose and finalize new rules for boilers, process heaters, and incinerators;

Extend compliance deadlines from 3 to at least 5 years to allow facilities adequate time to comply with the standards and install necessary equipment;

Direct EPA, when developing the new rules, to adopt definitions that allow sources to use a wide range of alternative fuels; and,

Direct EPA to ensure that the new rules are achievable by real-world boilers, process heaters, and incinerators and impose the least burdensome regulatory alternatives consistent with the President's Executive Order 13563.

Access a release from the Members (click here). Access a fact sheet from the Members with links to background information (click here). Access legislative details for H.R.2250 (click here). Access links to the final rules, fact sheets, and regulatory impact analyses for each of EPA's regulatory actions (click here). Access more information from EPA's Emissions Standards for Boilers and Process Heaters and Commercial / Industrial Solid Waste Incinerators website (click here). [*Air]

Tuesday, June 21, 2011

Jun 21: U.S. EPA announced that in response to requests from members of Congress and to encourage additional public comment it will extended the timeline for public input by 30 days on the proposed mercury and air toxics standards, an extension that will not alter the timeline for issuing the final standards in November 2011 [See WIMS 3/16/11].

In a brief statement, Administrator Lisa Jackson said, "EPA will put these long-overdue standards in effect in November, as planned. In our effort to be responsive to Congress and to build on the robust public comment process, we will extend the timeline for public input by 30 days, which will not impact the timeline for issuing the final standards. These standards are critically important to the health of the American people and will leverage technology already in use at over half of the nation's coal power plants to slash emissions of mercury and other hazardous pollutants. When these new standards are finalized, they will assist in preventing 11,000 heart attacks, 17,000 premature deaths, 120,000 cases of childhood asthma symptoms and approximately 11,000 fewer cases of acute bronchitis among children each year. Hospital visits will be reduced and nearly 850,000 fewer days of work will be missed due to illness."

EPA proposed the first ever national mercury and air toxics standards on March 16, 2011. The standards will be phased in over three years, and states have the ability to give facilities a fourth year to comply. EPA said that currently, more than half of all coal-fired power plants already deploy widely available pollution control technologies that are called for to meet these important standards. Once they are final in November, these standards will ensure the remaining coal-fired plants, roughly 44 percent, take similar steps to decrease dangerous pollutants.

Monday, June 20, 2011

Jun 16: Senator Kent Conrad (D-ND) introduced what he called "comprehensive energy legislation intended to lessen America's dependence on foreign oil, reduce gas prices, and strengthen the national economy." He said the legislation, "Fulfilling U.S. Energy Leadership Act" (S.1220) -- also known as the FUEL Act -- "is a blueprint for a national energy policy that would support domestic oil and gas production, including an environmentally responsible expansion of offshore activity, while also investing in the development of renewable fuels." The bill also promotes more alternative fuels and clean sources of electricity, including clean coal, and nuclear energy.

Senator Conrad said, "American families are struggling. Soaring gas prices are putting a squeeze on their budgets, forcing many to make tough choices as they struggle to make ends meet. Our dependence on foreign energy threatens both our economic security and our national security. The FUEL Act takes a responsible approach to securing America's energy independence." Senator Conrad indicated that through a mix of tax credits, grants and directives, the bill would increase production of domestic oil, gas and coal, as well as renewable and alternative fuels;boost manufacturing and use of electric vehicles; and dramatically cut America's need for foreign oil.

Senator Conrad said, "The FUEL Act is a balanced plan to reduce America's dependence on foreign oil. A key component of my plan is additional investment in one of America's biggest powerhouses -- North Dakota. The FUEL Act provides incentives for biofuels production and incentives for our coal-based facilities and rural electric cooperatives that utilize clean energy technologies. This bill could provide a big boost for both our nation and North Dakota." He indicated that several North Dakota energy and agriculture organizations have come out in support of the bill including: the North Dakota Corn Growers Association, North Dakota Association of Rural Electric Cooperatives, and Great River Energy (GRE).

According to summary information provided by Senator Conrad some aspects of the FUEL Act include:

Friday, June 17, 2011

Jun 17: On June 16, the U.S. Senate voted 73-27 in favor of an amendment (S.Amdt. 476) by Senator Dianne Feinstein (D-CA) to eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and repeal the import tariff on foreign ethanol. The amendment was identical to the Ethanol Subsidy and Tariff Repeal Act, which was introduced by Senator Tom Coburn, M.D. (R-OK) and Senator Feinstein in May. The vote reversed a vote on June 14, on an identical amendment offered by Senator Coburn -- Amdt. No. 436 to S.782, the Economic Development Revitalization Act of 2011, that was defeated by a vote of 40-59.

Senator Feinstein said, "Today's overwhelming vote shows a bipartisan consensus to repeal irresponsible ethanol subsidies and tariffs. The 73 votes sent a powerful message that the days of big subsidies for ethanol are coming to a close. We must be serious about addressing the debt and deficit, and this is a good first step." The ethanol subsidy currently gives large oil companies 45 cents for every gallon of ethanol they blend with gasoline, even though much of that use is mandated by law. If the subsidy is repealed by July 1, as the amendment calls for, it will save approximately $2.7 billion for the remainder of 2011.

The ethanol tariff is comprised of a 54-cent-per-gallon secondary tariff and a 2.5 percent ad valorem tax. The ethanol tariff makes the United States nation more dependent on foreign oil by increasing the price of imported ethanol.Senator Feinstein said, "Ethanol is the only industry I know of that receives a triple crown of government support: its use is mandated by law, it enjoys protective tariffs and oil companies receive federal subsidies to use it. These flawed policies, which cost taxpayers nearly $6 billion a year, must be changed."

Senator Coburn issued a release saying, "Today's vote was a major victory for taxpayers and a positive step toward a serious deficit reduction agreement, which is our only hope of averting a debt crisis. An overwhelming bipartisan majority of senators embraced pro-growth tax reform while rejecting the parochial politics that so often paralyze the Senate. The best way to reduce our crushing $14.3 trillion debt is by reducing wasteful spending a billion dollars at a time. This amendment saves taxpayers $3 billion. In light of today's lopsided vote, I urge my colleagues in the House to eliminate this wasteful earmark and tariff at their earliest opportunity." Coburn indicated that on an annual basis the Feinstein-Coburn amendment would save taxpayers $6 billion. Because the year is half over, the amendment would save $3 billion.

Sen. Coburn also indicated that a broad coalition of organizations on the left and right including the Club for Growth, Americans for Prosperity, Koch Industries, and the Sierra Club all supported the Feinstein-Coburn amendment. The highly diverse coalition included many other major national environmental organizations supported the amendment, along with the Competitive Enterprise Institute.

In response to a question: "What's the White House's reaction to the ethanol subsidies vote that's going to take place in the Senate?"; White House Press Secretary Jay Carney responded, "Well, we oppose the full repeal of that subsidy, but as you know, we are focused and have been focused on a broad strategy including increasing domestic development of oil and gas but also aggressive development of alternative fuels including biofuels, and also improving our efficiency, our fuel efficiency. And as part of our overall strategy, we would like to see reform that would reduce costs in terms of the subsidy in question here, but not -- we were not -- we did not support the full repeal."

The Renewable Fuels Association (RFA) issued a statement saying, "We are disappointed in the shortsightedness of this vote, particularly as this same body voted less than one month ago to preserve billions of dollars in taxpayer handouts to the oil industry. As the underlying bill to which this amendment is attached is unlikely to make it to the president's desk, this vote was a freebie with no real consequences."

Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC) dismissed the Senate passage of the amendment to end the ethanol tax credit saying it was "a distraction from a real energy discussion." She said, "This week's debate over ethanol is another case of politics over substance that once again distracts from an honest and comprehensive discussion about America's energy future. With this song and dance now over, advanced and cellulosic ethanol producers will continue to work with Senators to find common ground on a forward-looking and productive new way to promote a fuel that is already an important part of the U.S. energy portfolio and has a very bright future. We look forward to moving a proposal to the President's desk that expands the market for ethanol and expedites the commercialization of promising new ethanol technologies and fuels."

The Senate also rejected by a vote of 41-59, an amendment (Amdt. 411) by Senator John McCain (R-AZ) that would have prohibited the use of Federal funds to construct ethanol blender pumps or ethanol storage facilities. RFA reacted to that defeat in a statement saying, "This vote signifies that an anti-ethanol wave in Congress isn't swelling, but rather that all this attention on ethanol was little more than political posturing. Lawmakers must now pivot to fact-based, comprehensive discussions about diversifying America's fuel markets and weakening the grip of OPEC and other nation's over our economy and energy security. American ethanol producers look forward to working in a constructive manner with lawmakers keeping an open mind about the future of American energy production. Renewable fuels like ethanol are the most effective tools we have today to reduce oil imports and prices at the pump."

RFA issued a statement on the defeat of the McCain amendment saying, "This vote signifies that an anti-ethanol wave in Congress isn't swelling, but rather that all this attention on ethanol was little more than political posturing. Lawmakers must now pivot to fact-based, comprehensive discussions about diversifying America's fuel markets and weakening the grip of OPEC and other nation's over our economy and energy security. American ethanol producers look forward to working in a constructive manner with lawmakers keeping an open mind about the future of American energy production. Renewable fuels like ethanol are the most effective tools we have today to reduce oil imports and prices at the pump."

On June 17, RFA issued a lengthy release entitled, "Senate Ethanol Debate: Peeling Away the Onion," attempting to explain the happenings in the Senate over the last several days. According to RFA, "For ethanol interests, the United States Senate was a cauldron of confusion this week. In rapid succession, the Senate voted to keep ethanol tax credits through the end of the year, to repeal those tax credits immediately, and then to allow federal funds to assist in the installation of ethanol refueling infrastructure like blender pumps. Pundits, ethanol advocates, and many others are now trying to make sense of what happened and where the debate goes from here."

RFA President and CEO Bob Dinneen provides some insight into the votes this week and what it may or may not mean. The release indicates that the RFA "continues to support transitioning and transforming the current tax incentive and will work with lawmakers in both chambers to craft a policy that does so in a fiscally responsible and forward-looking manner to ensure America's ethanol industry continues to evolve." The posting concludes, "At the end of a crazy week, it is more clear than ever that the Senate needs and the public will demand a more thoughtful and comprehensive discussion about ethanol and energy policy. . . this week's political theatre did very little to provide answers. With a dose of common sense and the dogged commitment of Senators Klobachar, Thune, Grassley, Durbin and others, perhaps we'll have clarity soon."

Julie Sibbing, director of the agriculture program for the National Wildlife Federation (NWF) praised the Congressional action and said, "With the tremendous success of Senators Coburn and Feinstein's amendment in the Senate to end the ethanol tax credit and Representative Flake's success in the House in prohibiting funding for special ethanol infrastructure, we are happy to see that Congress is finally willing to draw the line with regard to subsidizing the corn ethanol industry. This industry has been extremely damaging to the environment, causing increased soil erosion, water pollution, and loss of wildlife habitat. It is far beyond time to stop throwing money after conventional biofuels and to move on to launching the next generation of cleaner, greener bioenergy from native grasses and trees."

Thursday, June 16, 2011

Jun 16: The Bipartisan Policy Center's (BPC) National Transportation Policy Project (NTPP) held a press conference to release a new report, Performance Driven: Achieving Wiser Investment in Transportation, which they said is a bold set of recommendations for creating a more effective and efficient federal surface transportation system given the current fiscal realities facing the nation.

BPC Board Member, and NTPP Co-Chair, Chairman Emeritus, Dickinson Wright, PLLC and Former Detroit Mayor Dennis Archer said, "The economic strength of the country is dependent on our ability to invest effectively in our transportation infrastructure. In the context of severe fiscal challenges and budgetary constraints, we need to make difficult choices and to consider trade-offs. But these constraints and limits can also provide us with the opportunity to accomplish significant programmatic reforms and to do more with less. What NTPP proposes in this report is a framework for ensuring that, no matter the amount of resources available, we should invest in a targeted and performance-driven way. Such an investment strategy can bring both short and long-term benefits. But, as the Report notes, '. . . no matter how much money is available for transportation at the federal level, it needs to be invested wisely.'"

Co-Chair Congressman Martin Sabo (D-MN), former Chairman of the House Budget Committee said, "This report being issued today retains and builds upon the principles contained in our June 2009 report, translating that long-term vision for the nation's surface transportation policies into an immediately implementable and streamlined programmatic structure that can manage within existing revenue levels. As recommended in NTPP's 2009 report, it is nearly impossible to imagine that the comprehensive reforms that we recommend can be achieved without fundamental reform in the transportation planning process. Such changes will enable almost everything that we recommend in this new report, including, importantly, our capacity to invest scarce resources in the most beneficial programs and projects. A more outcome- and performance-driven planning process is fundamental to ensuring that better investment decisions will be made."

According to summary information, the aim of this report is to reform, consolidate, and scale the Federal transportation program to maximize progress toward a set of clear national objectives, within a budget constrained by existing revenue levels. "NTPP continues to believe that any amount of federal investment in transportation should advance specific national purposes in the areas of: economic growth, national connectivity, metropolitan accessibility, energy security and environmental protection, and safety. NTPP evaluated existing transportation programs based on the extent to which each is able to advance these national purposes and leverage non-federal funding." The "Key Legislative Recommendations" include:

Streamline over 100 programs, by consolidation and elimination, into ten core programs

Eliminate programs that lack a specific national purpose

Clearly articulate national purposes and a suite of overarching national goals

Prioritize the management and preservation of existing transportation system assets

Put a more robust, outcome-oriented, better funded transportation planning process in place

Develop a National Freight Strategic Plan

Make bonus funding available to incentivize effective performance

Put in place incentives for investments that are able to leverage non-federal resources

Support, promote and reward states and metropolitan regions that secure sustainable revenue

Reduce restrictions, regulations, and barriers to non-federal investment in transportation

The report indicates that, "We found a major streamlining and downsizing of the current suite of programs can be achieved if one rigorously aligns spending priorities with the advancement of compelling national interests. By cutting more than $14 billion in annual expenditures from the existing program, we are able to propose a consolidated structure with ten core programs that are all clearly focused on advancing our nation's most important transportation related interests. . . In the long term, the programmatic framework proposed in this report allows for the achievement of wiser investments. It offers a sound strategy for securing broad public support for policies and resource commitments that will allow the U.S. to continue to achieve high standards of living and remain competitive in a highly mobile, global economy. It provides a way to make substantial investment and tangible improvement to the vital transportation systems on which our nation depends."

Wednesday, June 15, 2011

Jun 15: The Senate Environment and Pubic Works (EPW) Committee, Chaired by Senator Barbara Boxer (D-CA), with Ranking Member James Inhofe (R-OK), held a hearing on, "The Clean Air Act and Public Health." Witnesses included U.S. EPA Administrator Lisa Jackson and representatives from: American Nurses Association; the Mid-Atlantic Center for Children's Health & the Environment at the Children's National Medical Center; University of North Texas; MidAmerican Energy Holdings Company; and Washington Adventist Hospital.

Chairman Boxer indicated that she held the hearing to "conduct oversight on one of the most successful and significant public health statutes in our nation's history, the Clean Air Act" signed by President Richard Nixon in 1970. She cited numerous incidents of severe air pollution problems in the past and said, "While the Clean Air Act has dramatically improved health safeguards, more work remains to be done. A 2011 report by the American Lung Association shows that 154 million people live in areas with levels of toxic soot and smog pollution that current science demonstrates is dangerous."

She said, "Under the Clean Air Act, EPA is required to strengthen protections if scientific data indicates that pollution adversely impacts public health, including children's health. Recently, EPA proposed much-needed federal safeguards to reduce toxic air pollution from old power plants by requiring the use of modern pollution controls. These proposed safeguards would reduce mercury, lead, and chromium, which are known to cause cancer and birth defects. When EPA reduces toxic air pollution, it helps families and children in communities across our country. . . In contrast to the unsupported claims by some polluters who argue that health threats from mercury and other air pollutants are "exaggerated," we will hear today from EPA Administrator Jackson and representatives from the American Academy of Pediatrics, American Nurses Association, and the American Thoracic Society, who are experts on the issue. These witnesses will describe the critical steps that have been taken to reduce dangerous air pollution, and the important work that remains to be done."

Senator Inhofe said, "Over the past two years, the Obama EPA has moved forward with an unprecedented number of rules that will have enormous consequences for families, businesses, and the nation's fiscal well-being.Take for example, EPA's new greenhouse gas (GHG) cap and trade regulations.Administrator Jackson, you have admitted that regulating GHGs in the U.S. will have no impact on global GHG concentrations, yet your rules will come at an estimated cost of $300 to $400 billion annually.The Agency's voluntary reconsideration of the national ambient air quality standards for ground-level ozone -- a decision based on outdated data that could lead to significant economic constraints on the country -- is an another Agency action of dubious merit. EPA projects the cost of this rule in the order of $90 billion.Meanwhile, the Agency is planning to tighten the standards again in just two years.The Obama EPA is aggressively moving forward to regulate nearly all aspects of American life -- it now has regulations covering dust on farms and puddles of water along the side of road.And it is businesses and working families who will pay the price. . ."

Senator Inhofe also highlighted the recent announcement from American Electric Power (AEP) saying that because of EPA's proposed rules they would be forced to close nearly 6,000 Megawatts of "low cost (coal) power generation" and nearly 600 power plant workers will lose their jobs, totaling nearly $40 million in annual wages. He said, "These are good paying jobs in rural areas of Virginia, West Virginia, Kentucky, Ohio, Indiana and Texas.These jobs won't easily be replaced." [See WIMS 6/10/11]. It should be noted, however, that the Bipartisan Policy Center (BPC) Energy Project released a 56-page report on June 13, entitled, Environmental Regulation and Electric Sector Reliability, that concluded among other things that the, "impacts on the reliability of the electric system due to retirements and retrofits necessary to comply with EPA regulations are manageable.

Joe Kruger, Director for Energy and Environment, BPC Energy Project indicated in a cover letter to the report, "Overall, the report finds that the impacts on the reliability of the electric system due to EPA regulations are manageable and that there are tools available at the Federal, state, and local levels to address localized reliability risks. Nevertheless, the electric power sector and its regulators face significant planning challenges if the aim is to avoid localized reliability problems and minimize impacts on electric rates. Further, while recognizing the political difficulties, the report finds that there may be an opportunity to enact a legislative fix that could guarantee the environmental benefits of the Clean Air Act and provide a lower cost transition for the power sector." [See WIMS 6/14/11].

Administrator Jackson testified that, "All Americans should be very proud of the significant progress we have made cleaning up our air. However, we still have more to do. For example, about 25 million people now battle asthma. One of those 25 million is my youngest son. I am reminded on a regular basis about the importance of cleaning up our air. . . The Clean Air Act saves lives and strengthens the American workforce, and, as a result, the economic value of clean air far exceeds the costs. Expressed in dollar terms, the benefits of the Clean Air Act Amendments of 1990 alone are projected to reach approximately $2 trillion in 2020 with an estimated cost of $65 billion in that same year  a benefit to cost ratio of more than 30 to 1. . ."

She reviewed the Mercury and Air Toxics Standards proposed on March 16 [See WIMS 3/16/11], to regulate mercury and other toxic air pollution from power plants. She said The Clean Energy Group, a coalition of electric power companies, said, "Since 2000, the electric industry has been anticipating that EPA would regulate hazardous air pollutant emissions, and as a result, many companies have already taken steps to install control technologies that will allow them to comply with requirements of the rule on time. The technologies to control emissions at coalfired power plants, including mercury and hydrochloric acid, are available and cost-effective."

She also discussed the "Clean Air Transport Rule," proposed on July 6 of last year [See WIMS 7/6/10], which she said "would significantly improve air quality in cities throughout the eastern half of the U.S. by requiring 31 states and the District of Columbia to reduce their emissions of sulfur dioxide (SO2) and oxides of nitrogen (NOx) which contribute to ozone and fine particle pollution across state lines. . . we estimated that the rule would result in more than $120 billion annually in health benefits. . ."

Access the EPW hearing website for links to all testimony, opening statements and a webcast (click here). [*Air]